For the past two years, I’ve been doing everything I can to pay down debt. With interest rates as low as they are (and continuing to free fall), it makes more sense to me to save on costly interest payments than to save money. However, I do understand the importance of having an emergency fund and about 18 months ago, I decided to open up an FNBO Direct online savings account. Unfortunately for me and every other consumer saving money in banks, my interest rate is now half of what it used to be.
Every once in a while though, banks like to throw a little promotion to new or existing customers just to keep them loyal. FNBO Direct recently sent out an email to all of their current account holders, offering the chance to earn a 1.35% APY from October 3rd, 2011 thru March 31st, 2012. The rules on how to acquire this bonus are simple, and set forth below:
To qualify, make a deposit of $50 in each of the months of July, August and September into your account. Beginning in October, you’ll earn 1.35% APY* on the money above what your balance was on close of business June 30, 2011. Blend that rate with the current 0.85% APY** on the remainder of your Online Savings Account and you’ll maximize your interest.
This means that the money you had in your account beginning July 1st will not qualify for the increased interest rate. This also means that account holders will still earn 0.85% APY from now until October 3rd, 2011 on all funds, at which point 1.35% APY will begin to accrue on new money deposited post June 30th. When you blend the current 0.85% interest rate with the bonus 1.35% interest rate for six months, you’re left with a 1.10% APY over a 12 month span.
This bonus won’t knock your socks off but it does show a little spunk in the step of FNBO Direct. No matter what happens to interest rates over the next 9 months, the 1.35% APY is guaranteed. So, if interest rates continue to drop, they’ll be a little bit on consolation for customers who qualify for the added interest rate. Contrarily, if interest rates begin to rise, the promotion looks less valuable but either way, FNBO Direct is adding a small amount of additional savings to current customers. For a guy like me, 50 extra points on a small balance over six months will only add a couple of bucks to my wallet. For those who can make big time deposits before the 3rd of October, 50 points can mean a few hundred dollars earned.
For anyone with multiple online savings accounts, make sure you deposit often to FNBO and take advantage of this “awesome” 1.35% APY.